SANTA FE, N.M. — Gov. Susana Martinez said Wednesday she would consider reinstating New Mexico’s tax on food sales if it can help lower overall tax rates, amid a standoff with lawmakers over how to resolve the state’s budget crisis.
New Mexico eliminated the gross receipts tax on food in 2004 and previous attempt to revive the tax have drawn strong opposition from a long list of civic groups and advocates for the poor.
A food tax could be “part of a broader comprehensive tax reform package to close loopholes, broaden the base and reduce rates,” said Martinez spokesman Michael Lonergan.
“The bottom line is that any proposal must be simpler, more fair, allow New Mexicans to keep more of what they earn,” he said.
The governor and Republican allies in the Legislature have pushed for a comprehensive tax reform package that would eliminate hundreds of tax breaks in an effort to lower overall tax rates and improve the state’s business climate. Leading Democrats have criticized the complexity of that approach as a potential threat to state finances, backing a gradual phase-out of tax breaks that was vetoed by the governor.
Democratic House Speaker Brian Egolf called any food tax proposal a “no go” with is caucus, while the local Roman Catholic church vowed to fight its reinstatement as burden on low-income residents.
Allen Sanchez, executive director of the New Mexico Conference of Roman Catholic Bishops, criticized the governor for reviving the food tax debate when she has pledged to oppose any new taxes.
“Now she publicly says she’ll accept one that hurts the poorest people of New Mexico,” he said.
Republicans including House minority whip Rod Montoya have said a food tax can help stabilize and insulate state revenues from fluctuation in oil and natural gas prices — a major factor in the current budget crisis.
Also on Wednesday, the Democratic-led Legislature filed new arguments in its petitioned to the Supreme Court to rescind line-item budget vetoes that it says violate the state constitution. Oral arguments are scheduled for Monday at the court.
Attorneys for the Legislature say Martinez overstepped her constitutional authority by vetoing all funding for the legislative branch and state institutions of higher education.
Martinez has urged the Supreme Court to stay out of budget negotiations, while ordering a special session of the Legislature to start May 24. The governor has outlined rough proposals to restore most vetoed funding, with no sign of a compromise with Democratic lawmakers.